Contracts Outline

Contracts I. Nevell-Ewell Spring 2013
 
 
Intro
types of contracs
1.       Formal
•          Contracts under seal
•          Reconginares
•          Negotiable instruments
2.       Informal
·         Unilateral-promise for an act or a forbearance to act (I promise to give you 100 if you paint my house)
·         bilateral- promise for a promise (I promise to give you 100 if you promise to change)
Federal Court looks at state law (all Contracts origins from state law, 2 companies from different state becomes federal however law comes from state K was signed in)
K=O+A+C
all three needed/ enforceable when all three are legally binding
2 drug dealers want to meet to buy and sell drug. Valid O&A but not legal activity not enforceable.
Two types of authority
1.       Primary
•          Common Law (created by courts: land, interests in land, service contact)
•          UCC (when it deals with goods) Statutes
               Goods-means all things (including specially manufactured goods: ie: TMCLS make disk for students to connect to TWEN) which are movable and at time of identification to the contract for sale. Goods also include the unborn young of animals and growing crops.
 
2.       Secondary
•          Restatement I 1932 and Restatement II 1979 (refers to what common law should be)
Offer+ Acceptance+ Consideration =Contract (O+A+C=K) all three makes contract legally binding
I.
Mutual Assent
Mutual Assent: (Offer and Acceptance)
Lucy v. Zehmer (in bar making K)
Stepp v. Freeman (lottery ticket)
·         OFFER + ACCEPTANCE (through words – verbal/written)
•          Conduct
•          Meeting of the minds of all or both parties to a contract; objective standard is used (actions speak louder than thoughts) Lucy v . Zehmer Z signs K as a joke, L takes K serious.
•          Each party agrees to all the terms and conditions, with the same sense and same meaning as the other
3 Types of Contracts
•          Express contracts- oral or written (language used to establish contract)
•          Implied-in-fact contracts- by surrounding circumstances, conduct declarations of parties
   -Lucy ct surr circum has no legal effect
•          Implied-in-law contracts- judge made contract attempting to be fair.
 
*****Just because it is oral does not mean it is not expressed*****
Legal Status (determines rights and responsibilities)      Performance is one remedy available under K law
 
n  Consideration: This is the element that binds the parties’ expression of intent. It is the cause, motive or price which induces a contracting party to enter into a contract.
n  Remedies: This topic identifies the scope of recovery available to a party once the party establishes that a valid contract existed and was breached or not performed.
n  Statute of Frauds: This body of law will examine types of contracts that must be in writing in order to be enforced
*****Goods includes ALL things which are movable at the time of identification to the contract *****  *********for sale. Goods also include the unborn young of animals and growing crops. **********
Preliminary Negotiations are not offers because all “requirements” of an offer have NOT been met.
Negotiations are done in anticipation or before the parties enter into a K.
 
 
 
 
 
 
II.
 Offer
creates a power of acceptance in the er/ee and a corresponding liabilty on the er/or
OFFER* is a “yes-able” proposition and has three requirements (basic common law rules):
Offer must be communicated to Oee (but not necessarily by Or) Verbal or Nonverbal
A.      offeror showing intent to contract
Offeror must have a commitment to K
A.      have intent to contract or be legally bound
Offer must have definite terms (if o/ee change terms Counter offer)
A.      These include specific details about the contract that guarantee that the parties’ intent is fulfilled. If they are clear, they will enable the court to enforce the contract or determine what the parties bargained for
OFFER UCC (sale of goods)
**Same elements except Definite terms.
·         UCC §2-204(3) Formation of a K:
a)      Says “even though one or more terms are left open a K for sale does not fail for the indefiniteness if the parties have intended to make a K and there is a reasonably certain basis for giving an appropriate remedy (uses Gap Fillers for terms except Quantity &_)
1)      2-305 Price
2)      2-308 Place of Delivery
3)      2-309 Time of Delivery
 
Legal Status
INITIALLY: WAITING FOR THE ACCEPTANCE:
n  Offeror                                 O/R  (making the offer aka “Master of the Offer”)
n  Offeree                                                O/EE  (power of acceptance)
CONTRACT ESTABLISHED: OFFER, ACCEPTANCE (AND CONSIDERATION) EXIST:
n  Promisor                                              P/R  (made the promise)
n  Promisee                                             P/EE
n  unequivocal – sure                                                          equivocal – not sure 
***Rule state meaning, not consequences**** A communication occurs when offeror ____
Special Offers
General Rule
        1.  No social K (bridge player inviting ppl ove and 1 person no show)